Chapter_013

Chapter 13 : 

Chapter 13

Global Marketing Goals : 

Global Marketing Goals Defensive goals To compete with foreign companies on their own turf Have access to technical innovations in other countries Take advantage of differences in operating costs Preempt competitors’ global moves Not be locked out of future markets by arriving too late

Global Marketing Goals : 

Global Marketing Goals Offensive goals Increase long term growth and profit prospects Maximize total sales revenue Take advantage of economies of scale Improve over all market position Cultural misunderstanding Political un-certainty Import restrictions Exchange controls and ownership restrictions Economic conditions

Global Marketing Issues: Political Uncertainty : 

Global Marketing Issues: Political Uncertainty Some of the most common areas of difference lie in the way dissimilar cultures perceive time Another important source of misunderstanding is in the perceptions of managers about the people with whom they are dealing Other factors include Body language Physical contact Promptness Eating and cooking Social customs

Global Marketing Issues:Political Uncertainty : 

Global Marketing Issues:Political Uncertainty Government instability Social unrest Armed conflict Nations are newly emerging and anxious to seek their independence

Global Marketing Issues:Import Restrictions : 

Global Marketing Issues:Import Restrictions Tariffs, quotas and other types of restrictions hinder global business Designed to promote self-sufficiency, they can be a huge roadblock for multinational firms

Global Marketing Issues: Exchange Controls and Ownership Restrictions : 

Global Marketing Issues: Exchange Controls and Ownership Restrictions Some nations restrict the amount of earned and invested funds than can be withdrawn from it Some require that majority ownership lie within the country

Global Marketing Issues:Economic Conditions : 

Global Marketing Issues:Economic Conditions Although global economies are more intertwined, political upheavals and social unrest can do significant harm to the economy

Factors Fostering Global Strategy:External Factors : 

Factors Fostering Global Strategy:External Factors Market Factors – Degree of homogeneous market needs, transferable brands, ability to globalize distribution channels Economic Factors – Worldwide economies of scale, learning curves, global resourcing Environmental Factors – Communications ability, favorable governmental policies Competitive Factors – Global moves by competitors, preemptive strikes

Factors Fostering Global Strategy:Internal Factors : 

Factors Fostering Global Strategy:Internal Factors Structure – Ease of installing a centralized global authority Management processes – Capabilities and resources available to perform operational functions on a global scale Culture – Ability to project a global identity, increased tolerance People – Availability of foreign nationals, frequent travel, commitments to multi-country careers

Ten Commandments of Global Branding : 

Ten Commandments of Global Branding Understanding similarities and differences in the global branding landscape Do not take short cuts in global branding Establish marketing infrastructure Embrace integrated marketing communications Establish brand partnerships Balance standardization and customization Balance global and local control Establish operable guidelines Implement a global brand equity measurement system Leverage brand elements

Global Market Research : 

Global Market Research Population characteristics: Being one of the major components, managers should be familiar with the total population and with the regional, urban, rural and interurban distribution Ability to buy: Four broad measures to be examined Gross national product or per capita national income Distribution of income Rate of growth in buying power Extent of available financing

Global Market Research : 

Global Market Research Willingness to buy: The cultural framework of consumer motives and behavior is integral to the understanding of the foreign customer Factors such as the groups’ values concerning acquisition of material goods, the role of the family, can have effect on marketing because each can influence consumer behavior

Marketing Research Issues : 

Marketing Research Issues Language barriers—Meaning of questions and responses lacks precision in meaning Data content – Some nations may omit data viewed as important by marketers Timeliness – Census data infrequent and even abandoned by some nations Availability in the U.S. – Data may need to be gathered within the nation

Global Product Strategy : 

Global Product Strategy Global marketing research can help determine whether There is an unsatisfied need for which a new product could be developed to serve the foreign market There is an unsatisfied need that could be met with an existing domestic product either as is or adapted to the foreign market

Global Distribution Strategy : 

Global Distribution Strategy

Global Pricing Strategy : 

Global Pricing Strategy The pricing task is often more complicated in foreign markets because of additional problems associated with tariffs, laws etc. Import duties are probably the major constraint for global marketers and are encountered in many markets Another pricing problem arises because of the rigidity in price structures found in many foreign markets

Global Advertising / Sales Promotion : 

Global Advertising / Sales Promotion Language barriers Often media are traditionally used Limited media available and not able to reach out to target audience Decision of the type of agency used to prepare and place the firm’s advertisement must be made The use of sales promotion can also lead to opportunities and problems for marketers in foreign markets Sales promotion can also be used as a strategy for bypassing restrictions on advertisements placed by some foreign governments Sales promotion can be an effective means for reaching people who live in rural locations where media support for advertising is virtually non existent

Economic and Political Considerations : 

Economic and Political Considerations What is the foreign debt service expense as a percentage of hard currency foreign exchange earnings? What is the inflation rate? How substantial are raw material reserves that can be converted to hard currency? Are state subsidies, cheap credits and tax concessions for state enterprises being phased out? Does the government intend to sell stakes in state enterprises to foreign investors? Is there an emerging capital market based on real interest rates? What progress is being made toward developing a code of company law? Is the political decision-making authority centralized or fragmented? How rapid and substantial is continued progress toward democracy and a free market economy?

Investment Considerations : 

Investment Considerations What percentage of ownership may foreign companies have in joint ventures? Is private ownership of property recognized? Are intellectual property rights upheld? Can foreign investors obtain premises easily? Can initial capital investment be held in hard currency? Can a foreign investor sell its stake in a joint venture? Can hard currency be used to pay for imported raw materials? What is the tax rate on business enterprise profits?

Market Attractiveness : 

Market Attractiveness What is the sales potential in this country? Do the country’s geographical location and political relations permit it to serve as a gateway to other markets? How well developed are the necessary managerial and technical skills? How skilled is the labor pool? What are the labor costs? Can continued supply of the raw materials required for production be assured? What is the quality of transportation and telecommunications infrastructure? Will western executives accept being located in the country? To what degree have government officials developed familiarity with the Western business practices?

Growth Strategies for Global Marketing : 

Growth Strategies for Global Marketing Exporting Licensing Franchising Joint ventures Strategic alliances Direct ownership

Marketing Mix - Standardization : 

Marketing Mix - Standardization This strategy is more likely to succeed under the following conditions When the markets are economically similar When worldwide customers, not countries are the basis for market segmentation When the customer behavior and lifestyles are similar When the product is culturally compatible across the host country When the firm’s competitive position is similar in different markets When competing against the same competitors with similar market shares in different countries rather than competing against purely local companies When the product is an organizational and high-technology product rather than a consumer product When there are similarities in the physical, political and legal environments of home and host countries When the marketing infrastructure in the home and host countries is similar